Student debt's at a record high, and this company's cashing in by trying to help

The average debt burden weighing on students graduating from
college this year will be a record high.

That spells good news for student-loan-focused marketplace
lending startup CommonBond.

The New York-based firm announced Tuesday that it has taken on
another $35 million in the form of a Series B round of funding.
August Capital led the new funding round, according to
CommonBond chief executive David Klein.

The startup is also adding a new member to its advisory board:
Hans Morris, a former executive with Citigroup and ex-president
of Visa, now a partner with venture-firm Nyca
Partners.

The Series B funding round follows the hire of former Macquarie
and Morgan Stanley banker Morgan Edwards as its chief
financial officer and ex-Citigroup banker Vinayak Gurjar as chief
risk officer earlier this year.

The firm in June closed its inaugural securitization of
graduate student loans, raising $100
million in the process. In February, it inked a partnership
with Nelnet, a Nebraska-based loan servicing firm that has
committed to buying a portion of the loans the startup
generates.

CommonBond has gone out of its way to tap into the most
reliable segment of student borrowers — graduate students —
instead of undergrads.

The emergence of these lenders has come at a time when banks have
withdrawn from the student lending arena and student debt has
been ballooning.

The class of 2015 will graduate with more than $35,000 in debt on
average, according to
research from Edvisors.com. In 2010, student-loan debt
overtook auto loans and credit cards as Americans' largest source
of nonmortgage debt.

Student loans are especially attractive to investors. Unlike
other forms of consumer debt, including home loans and
credit-card debt, it cannot be discharged via bankruptcy, so the
borrower will always face the expectation of repayment.